According to the recently released Global Business Complexity Index by TMF Group, Singapore is the sixth easiest place to do business in Asia, only behind Thailand, South Korea, Japan, Hong Kong and Taiwan. The index itself compares key administrative and compliance demands across 76 jurisdictions worldwide.
The city-state also ranked much higher than many of its Southeast Asian neighbours as well as other commercially attractive nations. These include India, Vietnam, Malaysia, Philippines, Mainland China and Indonesia.
“For overseas companies and investors, a country’s simplicity or complexity is an important but often overlooked factor. And Singapore scores well on this scale. The pro-business policies, its connectivity within Southeast Asia and across the globe, and its highly skilled workforce give it a strong competitive advantage. Firms know that if they set up in Singapore, they can get work done easily”, TMF Group’s Managing Director for Singapore Mr Kim Leng Siaw.
The report ranks worldwide jurisdictions by how simple or complicated they are to do business. It measures factors such as rules regulations and penalties, the difficulty of accounting and tax, and the difficulty of hiring, firing and paying staff.
The report found that the cost of setting up a business in Singapore is relatively low; citing the nation’s ‘Know Your Client’ requirements in particular as being clear and transparent, helping new companies avoid bureaucratic obstacles that they would otherwise face in other countries around the world.
Despite this, there remains some formalities and policies in place that prevent Singapore from ranking higher in the index. One such example is the compulsory use of CorpPass as the only login method for online corporate transactions with government authorities as well as the recent changes to Singapore Employment Act in April 2019. The ‘Know Your Client’ requirements which serve as a boon to companies can also be considered a drawback that might slow down the process of incorporating companies.
“Almost all the changes we have seen in Singapore have justifications, but even so they represent new challenges for the businesses who must comply with them. Overall, however, the benefits of doing business in Singapore will continue to outweigh the disadvantages”, added Mr Kim.
A copy of the Global Business Complexity Index by TMF can be found here.